What happened at the IAIABC’s Convention-Part 1?

A few weeks ago I attended the International Association of Industrial Accident Boards and Commission’s 97th annual convention in Madison, Wisconsin. Wisconsin was the first state to have a constitutional worker's compensation law and that centenary was a central theme of the convention. While other states in the U.S. have some claim to concurrent or even earlier laws, Wisconsin probably wins by virtue of the first fatality claim being paid under legislation declared valid by the state’s Supreme Court.   

As a speaker, I was honoured to receive a commemorative coin specially minted for the centennial. The antique bronze medallion bears the image of the Wisconsin capital building and the state’s motto, “Forward” on one side. On the obverse, a stylized “W” and character illustrate the compromise that was reached a century ago. The presentation case included a card stating I would also receive a printed commemorative volume of the “reflections” on the history and development of workers’ compensation in the U.S., but you can read the content of those reflections online. By the way, the placement of the apostrophe on the coin is correct. Wisconsin’s system is the “worker’s compensation” system; all others in Canada and the U.S. use the plural possessive “workers’ compensation.” (More trivia: another exception to the plural-possessive rule is the title of the legislation in British Columbia, which omits the apostrophe altogether).   [gallery]

The importance of workers’ compensation as social legislation as opposed to pure insurance, was also underscored in part by reference to the 50th anniversary celebrations held in 1961. While in the present environment it may not be possible to garner the same attention, for that anniversary the U.S. Post Office issued a stamp, and President Kennedy gave an address in recognition of the half century milestone.

What was fascinating about the various sessions exploring the development of workers’ compensation in the U.S. was the focus on its nature as a compromise, and its intent as mechanism to improve the health and safety of workers. I was impressed how often the theme of occupational health and safety was presented both in its historical sense and as the present and yet undiscovered land (after all, we have been at it for 100 years and we have yet to achieve safe workplaces free of work-related injury, illness and death). Several presenters made reference to the 1972 Report on National Commission on Workmen’s Compensation. The commission was chaired by John F. Burton, Jr. who was an honoured guest at the convention. It is interesting to note the commission’s view on prevention: 

"We recommend that insurance carriers be required to provide loss prevention services, and that the workmen's compensation agency carefully audit these services. State-operated workmen's compensation funds should provide similar accident prevention services under independent audit procedures where practicable."

A hundred years on, one has to wonder how much of a priority prevention services really are.

On a similar note, OSHA in the U.S. appears to be evaluating if state OSHA programs are living up to their requirements to offer occupational safety and health programs at the state level that are of equivalent effectiveness as those offered by the national agency. The enhanced Federal Annual Monitoring and Evaluation (FAME) reports make interesting reading for any agency that has a prevention mandate. Timeliness of reports, what’s included in databases, and how enforcement is being done are all included. In the ones I’ve read, there are also responses from the state agencies with concrete actions and commitments.   

I’ll have more from this event in a later post.

Does a timely First Report of Injury really matter or is it just a bureaucratic requirement?

My last post was about the requirements many jurisdictions have for timely reporting of work-injury claims to the workers’ compensation authority. I stated my reasons in support of timely reporting and compliance with whatever standard set by the jurisdiction: health and safety of other workers, timely treatment and benefits for the workers. A number of people commented to me about the post. Most agreed that there was some value in requiring employers report injuries on a timely basis but thought short legislative reporting requirements imposed by the workers’ compensation authority were simply a bureaucratic requirement. They argued there is no real harm done to the worker, the authority or the system if firms failed to comply with the first report of injury (FROI) requirements. Some also suggested that the penalties imposed and the fines collected in some jurisdictions looked more like a “money grab”.

As if in answer to these criticisms, a summary of recent research on this topic arrived in my inbox. Under the heading “Benefits of Early Reporting”, the article from the Utah Workers’ Compensation Fund noted:

· The faster the claims process is started, the lower the workers compensation costs.

· When there was a delay in reporting, there were higher medical costs, higher rates of attorney involvement and litigation, and disputes over causation, and longer than normal periods of disability for a particular injury.

· After seven days, claims costs began to escalate, and when reporting was delayed 29 or more days, the claims costs were about 45 percent higher.

· A study by a private insurer on back injuries, carpal tunnel syndrome and other nerve disorders, they discovered the claims filed five or more days after an injury cost an average of 15 percent more than similar claims filed within 48 hours

· Injuries reported within 10 days cost an average of $12,082. Injuries reported between 11 and 20 days cost $15,582, and those reported between 21 and 30 days cost $17,920 -- an increase of 48 percent more than those reported in 10 days or less.

I think this evidence is compelling. Holding employers to a timely FROI is not just a bureaucratic requirement. It has the proven potential to reduce both the human and financial costs of injury.

Regardless of any jurisdictional requirement for early reporting, getting that FROI in is a benefit to both workers and employers.

How long should it take for a First Report of Injury to be submitted?

A story out of Jefferson City, Missouri, got me thinking about how long it should take an employer to file the first report of injury in worker’s compensation systems. Because timely prevention activity, claim decision making, and payment all depend on reporting, it stands to reason workers’ compensation agencies would be concerned about late reporting.

The Missouri story starts out as follows:

A-G Reaches Settlement Over Worker's Comp Violations

Attorney General Chris Koster said today he has reached agreements with two companies who violated Missouri’s workers’ compensation law by knowingly failing to report worker injuries to the Division of Workers’ Compensation within the prescribed time frame.

In Missouri, the prescribed time for an employer to submit the first report of injury (commonly called FROI in many states) is defined by the Workers' Compensation Law (Missouri Revised Statutes Chapter 287 Section 287.380.1)

“Every employer or his insurer …shall within thirty days after knowledge of the injury, file with the division … a full and complete report of every injury or death to any employee for which the employer would be liable to furnish medical aid, other than immediate first aid which does not result in further medical treatment or lost time from work…”

In practice, employers in many U.S. states buy their workers’ compensation insurance from an insurance company and the insurance company staff or a third party administrator (TPA) manages the claim. Whether the employer or the insurer or the TPA informs the state agency of the time-loss injury, it must be done promptly. In Missouri, the promptness standard is set at 30 days.

The news story goes on to say that two TPAs who were the ones who were repeatedly delaying. In many jurisdictions, the TPA claims managers are located in a different state, and that was the case in this story. As part of their contracts with various firms, the TPAs had taken on the responsibility of filing the first report of injury to the State workers’ compensation agency. The Missouri “Division of Workers’ Compensation” requires the data to ensure timely and appropriate treatment of injured workers and to make certain workers and their families are fully aware of their rights. More generally, that FROI can be used as a prevention tool to protect other workers from similar injuries.

Rather than go to Court, the two TPAs settled with the Attorney General who was prosecuting the case. The two offending TPAs agreed to pay the state just over $100Kbetween them and to admit to violating the law. They also agreed to remain in compliance for two years and to take necessary steps to prevent recurrence of future violations.

Not every state applies a penalty for late filing of the first report of injury. To the best of my knowledge, Alabama, Arizona, Colorado, Michigan and North Dakota are among those that don’t, but I don’t have any data on how compliant employers are in these states with the statutory reporting time (typically 7 or 14 days). Wisconsin has a 14-day standard and publishes an indicator which currently shows more between 74 and 77% of first reports of injury being received promptly.

In Canada, the timeframe for reporting an injury varies from province to province but three- and five-day standards are common. The AWCBC posts the reporting requirements and the penalties prescribed for late reporting and other offenses at the following links:

•  Summary Requirements for Reporting a Claim


•  Penalties for Delay in Reporting (General)

Ohio reports that 74.5% of FROIs are received within that state’s 7-day time limit. This is impressive but some other states do even better. Maine requires the FROI within 7 days after the employer receives notice or knowledge of an employee lost-time injury. The state has an 85% compliance target but was tracking closer to 90% in mid 2010. My understanding is that Maine applies a $100 penalty for each late filing (beyond 7 days) of the first report of injury.

Minnesota assesses progressively higher penalties for late filing of the first report of injury (typically beyond 10 days of the first day of disability) with each violation. The first offense in any 12 month period attracts a warning but penalties go up after that for each subsequent offense ($125, $250, $375, $500 for five or more offenses). In 2009, the state assessed 694 penalties totalling more than $309,000 for late filing of the first report.

Other states have even more aggressive levels. I understand Texas has a 10-day limit with a fine of up to $25,000 per day for violations although I could not confirm if any firms had to pay anywhere near that amount.

Does the threat of financial penalties increase timely reporting behaviour? I could not find any comparative figures on compliance or penalties but am interested in any data you may have on this topic. I think the Missouri story and published compliance rates from Maine and Ohio certainly send important messages about the seriousness with which these states take the timely reporting of injuries.

How would you design a completely new workers' compensation system?

I was asked a few weeks ago how I would design a workers’ compensation system.  I’ve actually given this a lot of thought over the years and have come up with some principles that I believe would optimize a new workers’ compensation system in a society similar to the Canadian context.   

Before you even glance at the following statements, let me make one point crystal clear.  I am not advocating any existing system change to adopt any of the following items. This is just a conversation starter intended to help in a ‘green field’ exercise.   Each item in the list is in some way dependent on others so the list is intended to be applied in its entirety to a hypothetical jurisdiction. 

Remember, these are my personal opinions based on my own experiences and observations; these items are not intended to be a statement of direction for WorkSafeBC or a prescription for any other existing system. 

Let me also add that each item here could fill pages of discussion and analysis.  I would be happy to discuss any one of them. 

Finally, the list is not comprehensive.  There are lots of other items that I would add for the design of a complete system but that is beyond the scope of a personal blog.

Keeping that in mind, here are my top dozen design criteria/features for such a hypothetical new workers’ compensation system in a society similar to Canada:

1.        Prevention orientation:  This has to be at the top of the list.  Employers would be required to report all work-related injuries to the agency within three working days.

2.       Universality:  Every worker and employer should be within the scope of coverage… and all work-related injuries, illnesses and diseases should be included within scope.  This takes away workers’ rights to sue but creates a comprehensive no-fault coverage system.

3.       Integrated: Given the universality of coverage, it makes sense to combine and integrate the compensation and prevention (consultation, education, promotion and compliance enforcement) functions.  It also makes sense to have the rate-making and financial authority integrated into this model.

4.       Accessibility:  workers and employers should have instant electronic access to information about their claim or claims, be able to communicate, and transact all business with the workers’ compensation insurer without temporal, language, bureaucratic or other barriers.

5.       Actuarially based:  full funding (capitalization of costs) for injuries should be maintained by injury year (premiums should cover all incurred costs including prevention and future administration).

6.       Comprehensive:  All medical diagnostic, treatment, and rehabilitation (physical, social, psychological and vocational) should be covered.  This ensures that the costs of injuries are born by industry and not the taxpayer.  It also is consistent with the current Canada Health Act, which does not include payments made by a workers’ compensation system in the definition of an insured health service.

7.       Supporting of the worker-employer relationship:  all claims of less than 8 weeks should be paid directly to the worker by the employer (at the prescribed rate).  The employer would be reimbursed by the workers’ compensation agency dollar-for-dollar for all wage-loss benefits paid to the worker through week six of the claim.

8.       Supportive of complete claims reporting:  Experience rating would not apply to claims of less than 8 weeks duration; this creates an incentive for firms to report all injuries (employers get to recover what they spend on wage-loss benefits they paid the worker) while retaining the experience rating that most employers feel adds a fairness to the system for those with poor performance.

9.       Encouraging of early and safe Return-to-Work:  Employers will be directly responsible for wage-loss costs payable in week 7 and 8 of every claim.  Experience Rating will apply for claims of greater than 8 weeks duration.  These features provide incentives for early return to work and accommodations consistent with Disability Management procedures.

10.   Value the injury of all workers equally:  Experience rating based on duration of disability not cost.  This avoids the criticism that most experience rating systems are cost-driven and thereby devalue injuries to low wage earners.

11.    Compensate long term claims equitably:  Permanent Disability (not impairment) to be roughly comparable for workers with similar age, gender, education, industry, and occupational backgrounds relative to their counterparts without work-related injury.

12.   Credibility and independence in all classifications:  Pools of firms with similar risks should be self sustaining for the costs they incur.  Very limited possibilities for cross subsidization and re-insurance.

I repeat, these features are the general parameters and very brief rationales for a new system and are not intended to be a roadmap for reform of any particular system.  Any system is a product of its history, societal values, politics, and even geography.   The present design of any system is responsive to a particular environment.  I am not injecting these ideas into any particular reform process. 

I have conveniently left off how dispute resolution mechanisms would operate, how premium rates would be established and what one would do with exceptional cases (this is only a blog post, not a thesis).    

Perhaps you have your own ideas.  I would be interested in how you would design a system if you were starting from scratch.

Why is Ontario's WSIB phasing out its LMR program?

A few weeks ago, Ontario’s WSIB announced a major change in direction for its Labour Market Re-entry (LMR) program [roughly equivalent to WorkSafeBC's Vocational Rehabilitation Services].  The change will phase out the use of external providers and create a new Work Reintegration Program inside the WSIB. 

First a little background.  Back in 1997,  Ontario moved to a ‘self-reliance’ model; most employers were mandatorily required to accommodate an injured worker in a return to work with the accident employer.  The legislation also imposed a duty on the worker to cooperate toward this end.  For workers who could not return to their accident employer, the LMR program became the option.  The LMR program was to be delivered in the community by external professionals so in 1998, the internal disability case management and vocational rehabilitation functions of the WSIB for cases that could not return to their accident employer were outsourced.

In 2009, WSIB contracted an outside consulting agency to conduct an audit of the LMR and other Return-to-Work (RTW) services.  The report recommended changes to the program to make it more consistent with the leading practices of other jurisdictions (including WorkSafeBC).  This report, stakeholder consultations and a value for money audit showed that the re-training programs were not having the desired effect.  The lack of a link between re-training programs [employability] and effective labour market re-entry [employment] was identified as one root cause.  The absence of direct WSIB involvement in LMR actually hindered return to work and the effectiveness of LMR programs. 

The solution?  WSIB will phase out its use of external providers and will establish an internal role for ‘Work Reintegration Professionals’ who will actively “provide injured workers with a sound assessment and, if needed, high-quality, credible training that will -- to the best of the WSIB’s ability -- equip them for return to work.”  Clearly, the move is toward achieving better RTW outcomes and higher wage replacements for injured workers.

The new Work Reintegration Program is expected to be fully in place by the end of 2010.  According to the WSIB,

The new Work Reintegration approach will support:

• Increased simplicity of communication and co-ordination of services between WSIB and workers,


• Increased clarity of accountability,


• Greater assurance of workers getting the service they need, when they need it,


• Increased consistency of services provided in similar circumstances, and


• Improved management of expectations and a reasonable level of investment within clear cost parameters.

You can read background on all this on the WSIB website .

My inbox after vacation

I’m back from a break and have been catching up on developments in the world of workers’ compensation. Here are a few highlights from the my inbox over the last few weeks:
 Washington State’s Secretary of State has certified Initiative 1082 that would open the workers’ compensation insurance market in that state to private insurance. The Initiative would also eliminate the portion of the premium paid by workers (a feature that may have attracted some workers to sign on to the petition). While 18% of a sample of the signatures in support of the initiative being placed on the ballot were ruled inadmissible, the required minimum of valid signatures was achieved so the provision will be on the ballot in November.

Arizona’s governor signed into law a provision that will take the Arizona State Compensation Fund from a public competitive state fund to a private entity. It currently has about a third of the market in that state. The move will allow the new entity to expand operations into other states.


Alberta’s Employment Minister, Thomas Lukaszuk, announced his department will post safety records of all companies in Alberta. What exactly will be posted has not been revealed but speculation in the media suggests workers’ compensation lost-time claim data (presumably counts and dollars) will be part of what is published. The move is intended to improve safety for workers in that province. Press reports attribute the following statement to the Minister:

"Today is a new day for occupational health and safety in the province of Alberta. This is the day when status quo is no longer acceptable. The hammer is coming down on those who persistently fail to comply with safety laws.”

Tennessee proposed a law that would require all construction service providers to be included in the scope of coverage unless specifically exempted—a procedure that is open to certain sole proprietors and others but with a catch: the firm must be registered and the exemption must be applied for (subject to fees) before an exemption card good for two years is issued.

President Obama has taken aim at the safety and return to work performance of federal agencies and executive departments. Under the acronym POWER (Protecting Our Workers and Ensuring Reemployment) departments are expected by

• Reducing total injury and illness case rates
• Reducing lost-time injuries
• Analyzing lost-time injury and illness data
• Increasing the timely filing of workers’ comp claims
• Increasing the timely filing of wage-loss claims
• Reducing lost production day rates
• Speeding return-to-work in cases of serious injury or illness

Vermont has increased the penalties for firms who are required to register and carry workers’ compensation coverage but fail to do so. Such firms will now be required to close immediately and a fine of $250 per day issued until they are in compliance.

I'm always interested in unique developments in workers' compensation and prevention.  Feel free to send any you come across to me.  As always, if you have any comments or insights, leave a post and add to the blog.

What's new in Canadian Research on Work and Health?

I spent part of last week at the Canadian Association for Research on Work and Health (CARWH) conference in Toronto.  The conference theme was Worker Health in a Changing World and participants included about 300 researchers from across Canada with some from the US and even Australia.

So, what was preoccupying the researchers at this event? There were so many threads, it is hard to pull them all together but here is a short list of topics that might give you a hint of the range discussed in sessions or presented in poster sessions:  asbestos, shiftwork/nightwork, vulnerable workers and those in precarious employment, stress, the heath of truck drivers, pesticides and cancer, effectiveness of OHS training and education, trends from Ontario's high risk firm intervention progam.

As with any multi-stream event, there is no way any one person can see or hear all presentations so it is a bit unfair to highlight some topics over others.  That said, I was really impressed by a couple of presentations that I did attend and think you will find them of interest as well. 

For those of you who work with larger employers, there was a great example from Fraser Health.  Shannon Atkins demonstrated how an internal call centre approach reduced the time for filing employer reports.  From the paper abstract, "Results to date are impressive. Form 7 submission timeline reduced from an average of 16.9 days to 1.72 days, with a mode of 0.04 days. Claim duration has been reduced from 49.2 days pre-call centre to 36.5 days."

Another fascinating presentation was "Long-duration claims – what is driving increases in duration and locked-in claims in Ontario?".  Sheila Hogg-Johnson's analysis showed that both duration and locked-in claims increase coincidentally with January 1998's Bill 99 legislative and policy change.  Now work is going in to examining exactly why. 

Several speakers discussed qualitative research examining topics like Joan Eakin's "The stigmatization of injured workers: The construction of "unworthiness" in the compensation process".  The care and concern for workers generally was reflected in every presentation.

Cameron Mustard's  work on comparing BC and Ontario long-term care injury rates and durations was preliminary but demonstrated the great power in using large data sets from different jurisdictions to ‘tease out’ differences (and that may lead to new approaches for fewer injuries and shorter duration).

One of the most insightful comments from the two days was contained in a presentation by Genevieve Baril-Gingras from Laval. She and a dozen other colleagues reviewed the occupational safety and health law in Quebec by examining its provisions with those of other jurisdictions elsewhere in Canada and the world. Their findings resulted in a set of recommendations, each one backed by what they found from the science and experience elsewhere.  And each recommendation was based on a proven provision in place in one or more of the other jurisdictions examined.  Clearly, there will be lessons for other OHS and workers' compensation agencies in this paper.

Beyond the findings and the recommendations, her presentation contained one line that really impressed me. She said: "Academic freedom = Responsibility".  Researchers need the freedom to gow where the research leads them, and if it leads them to conclusions that are uncomfortable or inconvenient, researchers still have a responsibility:  to tell it like it is. 

Just how research will be used by legislators and policy makers will depend on many factors.  The likelihood of making the best public policy decisions, however, depends on accurate, well researched information.  I'm glad there are people out there who take that responsibility in the study of work and health so seriously. 

 

To include or exclude Professional Sports Competitors from Workers' Compensation Coverage

Who should be covered by workers’ compensation?  In the beginning, coverage was limited to primarily industrial workers but most systems have expanded who is included within the scope of coverage.  In some cases, inclusions are accomplished by specifically identifying the industries (or occupations) to be covered in legislation.  In others, as in British Columbia, the legislation simply defines a principle (inclusion) and the specifics of any exemptions (exclusions) are defined by policy decision. 

Of jurisdictions with universal coverage, the rationale for inclusion is pretty straight forward.  From a prevention perspective, inclusion of all occupations provides an opportunity to strengthen the barriers, safeguards and defenses against personal injury and disease related to earning a living.  By engineering, substitution and administrative controls, the risks that would otherwise harm the worker can be minimized if not entirely eliminated... and the cost of workers' compensation premiums may provide an incentive to invest in these protections (or an added penalty for failing to).

Further, inclusion means all workers have equivalent protections. From a workers’ compensation perspective, insurance for (hopefully) rare events is provided and crystallizes the likely risk of a rare large financial claim or suit to the employer;  the premium and experience rating for a particular employer with workers in and about an industry serves as an added and (more or less) constant pressure to invest in prevention.  A further rationale is that mandatory inclusion prevents the costs of injury (and necessary healthcare) from being externalized to the public purse.

For jurisdictions with exclusions from universal coverage, the rationale may be more complex.  One rationale may be that the risks are very small and the costs of any actual injury or disease arising from the work very low so the benefits of insurance are negligible.  Other jurisdictions suggest that industries with ‘equivalent’ coverage may be exempted from the provision.  Sometimes, exclusion from some aspects of the workers’ compensation plan can be achieved by ‘carve outs’  and to a certain extent, self insurance with self administration, although this avenue is usually allowed only if the firm is large enough, financially stable enough, and ‘safe’ enough in the eyes of the jurisdictional regulator.  It may be necessary to include all firms under prevention standards but the workers’ compensation coverage by this logic would be optional.  On one hand, this should increase the firms motivation to protect workers since they will bear the costs of a suite or suitable settlement.  Unfortunately, this does not protect the taxpayer (in Canada at least) from the potential costs associated with health care and those who may not receive a speedy settlement (or never get the chance).   Exempting an industry or occupation, therefore, should intentionally consider these consequences. 

Professional sports competitors in hockey, football, winter sports like skiing are obviously poor candidates for inclusion.  The inherent risks and latent defects in the safeguards, barriers and defenses that would otherwise protect them from harm are numerous.  It is hard to think of regulating maximal exertion on razor-sharp blades while carrying long sticks  and making body checks safe without taking these essential elements out of professional hockey.  And on the insurance front,  who would you pool the risk of mixed martial arts competitors with?  In these sports, the economic model of what you can get ‘workers’ to do, is really an economic expected value one.  The pay and contracted benefits are going to have to convince the sports competitor (and his agent) that the residual risks of competing are being properly anticipated and compensated while the ownership (and those setting the rules) are going to have to make assurances sound enough to likely fend off potential suits.

Is there a case for their inclusion of sports competitors? Aside from the inherent externalization of necessary health care  costs to the public purse (or  a violation of the Canada Health Act principles if the sports team ownership pays for those services) and the principle of universality on its own,  I don’t think so.  That said, I don’t see any rationale for excluding coverage for the team coach, trainers, managers and other staff.  Their work and risks are not dissimilar from recreation facility staff, fitness instructors and equipment managers in many other sectors (schools, universities, private gyms, community recreation facilities). 

 I would be interested in your views.